Speaker unverified: belief

Transcript context

…This fortress balance sheet strategy, raising this equity capital, having additional margin of safety, and conservative accounting, in retrospect, it seems like the obvious right strategy for running a large financial institution. Why wasn’t everyone else copying it? Have people changed and does everyone else run their banks like this now? I think people are more conservative today. I think regulators are more conservative today. But again, I go back to people get involved in aggressive accounting. They don’t look at stressing their own bank in a real way. You saw people take too much interest rate risk, too much credit exposure, too much optionality risk, or sometimes it’s new products. If you look at the financial services, very often it’s the new products that blow up. It takes a while. They haven’t been through a cycle. You had that with equities way back in 1929, you had it with options, you had it with equity derivatives, you had it with mortgages. Even Ginnie Maes at one point blew up, even though they’re government guaranteed. Arguably, you had it with quant and with LT and CM.…

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